Online Gambling Billionaire Cashes In

Anurag Dikshit is well on his way to severing all ties with the online gambling company that catapulted him to billionaire status.

PartyGaming, the world's largest online gambling firm, announced Tuesday that Dikshit was selling 66% of his stake in the company (or 75 million shares) for about 250 pence a share, to net some 213 million pounds ($350 milIion). This will reduce the size of his holding to 9.5% from 28%.

But it won't stop there. Dikshit (pronounced Dix-it) is also planning to sell his remaining stake in the coming months, according to his spokesman.

He'll be donating the proceeds from both sales to the charity he founded several years ago, the Kusuma Trust, which provides welfare support and educational opportunities to at-risk children in Gibraltar, India and the U.K. The money will be transferred to the charity "as soon as it is practically possible" said Shimon Cohen, who represents Dikshit. There is already about 50 million pounds (or about $80 million) in the trust.

News of Dikshit's stake sale sent
PartyGaming's
shares plummeting by 15.6% in London on Wednesday, to close at 240.10 pence ($3.92).

But selling down his stake may actually improve PartyGaming's chances of getting a license to operate in the United States, assuming the 2006 federal ban on online gambling is eventually repealed and the sector regulated. Under current law gambling operators are unlikely to get licenses if one of their beneficial owners has a criminal record, which Dikshit does.

He pleaded guilty in December last year to violating American Internet laws and was slapped with a $300 million fine, which he paid off in June.

PartyGaming has meanwhile been positioning itself so that U.S. authorities can look favorably on it ahead of a law change. In April it reached an agreement with the U.S. Department of Justice in which it confessed to having previously violated American laws and said it would pay a $105 million fine, in exchange for protection from prosecution.

"We're keeping a close eye on all developments in the United States," PartyGaming spokesman John Shepherd said. Barney Frank recently introduced a proposal to legalize online gambling in the U.S. (See "Gambling Operators Bet On Barney Frank.")

Dikshit's representative insists he is not trying to make amends for his past involvement in the gambling sector by giving the proceeds from his stake sale to charity, adding that he has always intended to put as much money into his charitable trust as possible.

In terms of the timing of his sale, it is probable that Dikshit's financial advisors suggested selling his stake now to take advantage of the stock having doubled in the last year.

The notoriously private Dikshit has lived a rather modest life in Gibraltar for the last eight years. He doesn't own a car (though his wife does), preferring to walk around the small island, and eschews the typical trophy assets owned by billionaires, like boats and sports teams.

Dikshit, 38, has also been gradually distancing himself from PartyGaming over the last few years. He resigned from the board in May 2006, just a few months before the Bush Administration outlawed online gambling in the U.S. Since then he has barely been involved in day-to-day management activities of the company.

Last year Dikshit was ranked at No. 701 on the Forbes list of the World's Billionaires, with a net worth of $1.0 billion. He had joined PartyGaming in 1998, a year after it was founded by American entrepreneur Ruth Parasol, and wrote the company's software that allowed gamblers in different parts of the world to pay poker with one another.